Pyongyang, Dec 26 (IANS): South and North Korea on Wednesday held a symbolic groundbreaking ceremony for an inter-Korean project to modernise and reconnect roads and railways across their heavily armed border.

Officials from the UN and neighboring countries, including Russia, China and Mongolia, were also present as it could be the start of an ambitious plan to connect the inter-Korean railway to the Trans Siberian Railway so to create a route from Korea all the way to Europe.

The ceremony started at Panmun Station in the North's border town of Kaesong at around 10 a.m. with representation from both sides, Yonhap news agency reported.

A special train carrying some 100 South Korean participants arrived at the station earlier to attend the event.

Transport Minister Kim Hyun-mee, Unification Minister Cho Myoung-gyon, parliamentary leaders, and other road and railway officials and experts were among them.

"The groundbreaking ceremony is meaningful as it demonstrates the Koreas' willingness to actively cooperate...," the ministry said.

Ri Son-gwon, the chairman of North Korea's state agency in charge of inter-Korean ties was also present.

The event would be followed by "track-linking", signing a railway sleeper and unveiling a signboard at the station, the ministry said.

Seoul earlier received sanctions exemptions from the US on materials and items needed to hold the event in the North.

The development came after Korean leaders agreed in April to foster balanced development and co-prosperity on the peninsula.

After the September summit, several joint inspections of the North's railways and roads were conducted despite delays caused by concerns over possible violations of sanctions against Pyongyang.

This rail link would also mark the first time a South Korean train would run from Mount Kumgang to the Tumen River on the North's east coast since the peninsula was divided following the 1950-53 Korean War.

The actual construction would only start after the denuclearization issue and existing multilayered sanctions on North Korea were taken care of.